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The new rules are complicated. Here’s how to make sense of them if you’re shopping for an electric vehicle.

The Department of Treasury published new rules last year that will determine which new electric vehicles, purchased for personal use, will qualify for a $7,500 tax credit. They went into effect on April 18, 2023, and last for the next decade or so.
These new tax credit rules are complicated. The list of cars that qualify for the new tax credit can change from year to year — and even month to month. Many buyers in the EV market might have a few questions, including: Should I buy that new car now, or should I wait? Which cars qualify for the current tax credit, and which ones will earn the new one?
This is Heatmap’s guide to the new tax credit, why it matters, and what to keep in mind as you go EV shopping.
If you’re an ordinary American buying a brand-new EV to run errands and pick up the kids, these new rules apply to you. They will determine which cars you can get a federally funded discount on.
If you’re not buying a new car for personal use — because you’re getting it for your business, say, or because you’re buying a used EV — these new rules don’t apply to you. But you may qualify for other new subsidies. We get into those below.
And even if you are in that first category, you may discover it’s much cheaper to lease a new EV instead of buying it outright. We get into why below, too.
They completely change how the United States approaches the EV industry.
During the Bush and Obama administrations, the U.S. was focused mostly on getting automakers to begin to experiment with EVs. So it discounted the first 200,000 or so electric vehicles that each manufacturer sold by up to $7,500. If a company had cumulatively sold more than that number over time, as Tesla and General Motors eventually did, then the discount expired. By 2022, that had led to a peculiar situation where foreign automakers, such as Hyundai, could use the subsidy, while some of the largest American automakers couldn’t.
Now, U.S. policy is focused on two goals: (1) building up a domestic supply chain for EVs and (2) getting more EVs on the road. So the tax break is completely uncapped — any automaker can use it as many times as possible if they meet the criteria.
But many new requirements apply: Only cars that undergo final assembly in North America will qualify for any of the tax credit. Then, cars with a battery that was more than 50% made in North America will qualify for a $3,750 subsidy. And cars where at least 40% of the “critical minerals” used come from the U.S. or a country with whom we have a free-trade agreement will qualify for another $3,750 subsidy.
Those percentage-based requirements will ramp up over time. By 2029, for instance, 100% of a car’s battery and battery components must be made in North America.
Because Congress said so. The Inflation Reduction Act, which Democratic majorities in the House and Senate passed last year, mandated this change to the EV tax credit as part of its broad expansion of American climate policy.
Initially, fewer EVs will receive a subsidy under the new rules, Biden officials say. On a press call with reporters, a senior Treasury official argued that more cars will eventually qualify under the new rules than qualified under the old ones.
This year, at least 15 car or light trucks will receive some or all of the credit. Only some of those vehicles will qualify for the full $7,500 tax credit; some will qualify for a partial $3,750 tax credit. Here is the full list of qualifying models, along with the amount of the tax credit that they will earn:
• Audi Q5 TFSI e Quattro PHEV ($3,750)
• Cadillac LYRIQ ($7,500)
• Chevrolet Bolt ($7,500)
• Chevrolet Bolt EUV ($7,500)
• Chrysler Pacifica PHEV ($7,500)
• Ford Escape Plug-in Hybrid ($3,750)
• Ford F-150 Lightning, Standard & Extended Range ($7,500)
• Jeep Wrangler PHEV 4xe ($3,750)
• Jeep Grand Cherokee PHEV 4xe ($3,750)
• Lincoln Corsair Grand Touring ($3,750)
• Rivian R1S, Dual Large & Quad Large ($3,750)
• Rivian R1T, Dual Large, Dual Max, & Quad Large ($3,750)
• Tesla Model X Long Range ($7,500)
• Tesla Model 3 Performance ($7,500)
• Tesla Model 3 Long Range AWD ($3,500)
• Tesla Model Y AWD, Rear-Wheel Drive, & Performance ($7,500)
• Volkswagen ID.4 AWD PRO, PRO, S, & Standard ($7,500)
Some vehicles that earned the full tax credit in 2023, such as the Ford Mustang Mach E, don’t qualify for any benefit as of January 2, 2024.
Yes. A few examples: The Hummer EV, which costs more than $110,000 a piece, won’t qualify for either the new or old tax credit — it’s too expensive. And the Polestar 2 won’t qualify because it’s assembled in China.
Yes. Starting this year, the U.S. is preventing cars that receive too much manufacturing input from a “foreign entity of concern” — that is, China — from qualifying for any of the tax credit. This has reduced the number of vehicles that qualify for the $7,500 bonus.
This year, the government will also allow buyers to refund their EV tax credit at the dealership. That means buyers can now get up to a $7,500 discount at the moment when they buy their car instead of waiting until they file their taxes in the following year.
Yes. A married couple must have an adjusted gross income of less than $300,000 a year, and a single filer must have an AGI of less than $150,000 a year, to qualify for any aspect of the subsidy. A head-of-household must have an income of less than $225,000 a year.
Yes. Under the proposed rule, cars must have an MSRP below $55,000 to qualify for the credit. Vans, pickup trucks, and SUVs must have an MSRP below $80,000.
Yes. The Inflation Reduction Act also included a new $7,500 tax credit for EVs used for any commercial purpose. The Treasury Department is expected to interpret that provision to cover leasing, but it hasn’t announced the guidelines for that rule yet, so we don’t know for sure.
But the provision will probably tilt new EV drivers toward leasing their car rather than buying it outright, because the dealer should — emphasis on should — offer relative discounts on leasing vehicles as compared to buying them.
Yes. There’s also a new $4,000 tax credit for buying a used EV that costs $25,000 or less. It went into effect on January 1, 2023, so you can go ahead and use it today.
But note that it has even stricter income limits: Married couples can only take advantage of it if they make $150,000 or less, and other filers if they make $75,000 or less.
Here’s the list of cars that qualified for the $7,500 tax credit before April 18, 2023, according to the Department of Energy.
• Audi Q5 TFSI e Quattro (PHEV)
• BMW 330e *
• BMW X5 xDrive45e**
• Cadillac Lyriq
• Chevrolet Bolt
• Chevrolet Bolt EUV
• Chevrolet Silverado EV
• Chrysler Pacifica PHEV
• Ford E-Transit
• Ford Escape Plug-In Hybrid *
• Ford F-150 Lightning
• Ford Mustang Mach-E
• Genesis Electrified GV70
• Jeep Grand Cherokee 4xe
• Jeep Wrangler 4xe
• Lincoln Aviator Grand Touring *
• Lincoln Corsair Grand Touring *
• Nissan Leaf
• Nissan Leaf (S, SL, SV, and Plus models)
• Rivian R1S
• Rivian R1T
• Tesla Model 3 Long Range
• Tesla Model 3 Performance
• Tesla Model 3 RWD
• Tesla Model Y All-Wheel Drive
• Tesla Model Y Long Range
• Tesla Model Y Performance
• Volkswagen ID.4
• Volkswagen ID.4 AWD, Pro, and S models
• Volvo S60 PHEV *
• Volvo S60 Extended Range
• Volvo S60 T8 Recharge (Extended Range)
* These cars don’t qualify for the full $7,500 subsidy, although they all receive at least a $5,400 tax credit.
** Only some BMW X5 xDrive45e vehicles qualify — it depends where the car was made. Check the VIN or ask the dealership to confirm it was made in North America before buying.
This story was originally published on March 31, 2023. It was last updated on March 5, 2024, at 10:00 a.m. ET.
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The Series E round will fund the enhanced geothermal company’s flagship Cape Station project.
The enhanced geothermal company Fervo is raising another $462 million, bringing on new investors in its Series E equity round.
The lead investor is a new one to the company’s books: venture capital firm B Capital, started by Facebook co-founder Eduardo Saverin. Fervo did not disclose a valuation, but Axios reported in March that it had been discussing an IPO in the next year or two at a $2 billion to $4 billion valuation.
Much of the capital will be devoted to further investments in its Cape Station facility in Utah, which is due to start generating 100 megawatts of grid power by the end of 2026. A smaller project in Nevada came online in 2023.
Fervo’s last equity round was early last year, when it raised $255 million led by oil and gas company Devon. It also raised another $206 million this past summer in debt and equity to finance the Cape Station project, specifically, and reported faster, deeper drilling numbers.
“I think putting pedal to the metal is a good way to put it. We are continuing to make progress at Cape station, which is our flagship project in Southwest Utah, and some of the funding will also be used for early stage development at other projects and locations to expand Fervo’s reach across the Western U.S.,” Sarah Jewett, Fervo’s senior vice president of strategy, told me
“Enhanced geothermal” refers to injecting fluid into hot, underground rocks using techniques borrowed from hydraulic fracturing for oil and gas. Along with the geothermal industry as a whole, Fervo has found itself in the sweet spot of energy politics. It can provide power for technology companies with sustainability mandates and states with decarbonization goals because it produces carbon-free electricity. And it can host Republican politicians at its facilities because the power is 24/7 and employs labor and equipment familiar to the oil and gas industry. While the Trump administration has been on a warpath against solar and (especially) wind, geothermal got a shoutout in the White House’s AI Action Report as an electricity source that should be nurtured.
“Being clean and operating around the clock is just a really strong value proposition to the market,” Jewett said. “Utilizing an oil and gas workforce is obviously a big part of that story; developing in rural America to serve grids across the West; producing clean, emissions-free energy. It's just a really nice, well-rounded value proposition that has managed to maintain really strong support across the aisle in Washington despite the administration shift.”
But bipartisan support on its own can’t lead to gigawatts of new, enhanced geothermal powering the American west. For that Fervo, like any venture-backed or startup energy developer, needs project finance, money raised for an individual energy project (like a solar farm or a power plant) that must be matched by predictable, steady cashflows. “That is, obviously the ultimate goal, is to bring the cost of capital down for these projects to what we call the ‘solar standard,’’’ Jewett said, referring to a minimum return to investors of below 10%, which solar projects can finance themselves at.
While solar power at this point is a mature technology using mass-manufactured, standardized parts having very good foreknowledge of where it will be most effective for generating electricity (it’s where the sun shines), enhanced geothermal is riskier, both in finding places to drill and in terms of drilling costs. Project finance investors tend to like what they can easily predict.
“We are well on our way to do it,” Jewett said of bringing down the perceived risk of enhanced geothermal. “This corporate equity helps us build the track record that we need to attract” project finance investors.
Whether enhanced geothermal is price competitive isn’t quite clear: Its levelized cost of energy is estimated to be around twice utility scale solar's, although that metric doesn’t give it credit for geothermal’s greater reliability and lack of dependence on the weather.
While Cape Station itself is currently covered in snow, Jewett said, construction is heating up. The facility has three power plants installed, a substation and transmission and distribution lines starting to be put up, putting the facility in line to start generating power next year, Jewett said.By the time it starts generating power for customers, Fervo hopes to have reduced costs even more.
“Cost reductions happen through learning by doing — doing it over and over and over again. We have now drilled over 30 wells at the Cape Station field and we’re learning over time what works best,” Jewett said.
Overview Energy has raised $20 million already and is targeting a Series A early next year.
When renowned sci-fi author Isaac Asimov first wrote about space-based solar power in the 1940s, it helped inspire engineers and the federal government alike to take the idea seriously. By the 1970s, a design had been patented and feasibility studies were underway. But those initial efforts didn’t get far — challenges with launch costs, constructing the necessary structures in space, and energy conversion efficiency proved too much for scientists to overcome.
Now the idea is edging ever closer to reality.
The space solar company Overview Energy emerged from stealth today, announcing its intention to make satellites that will transmit energy via lasers directly onto the Earth’s grid, targeting preexisting utility-scale solar installations. The startup has already raised $20 million in a seed round led by Lowercarbon Capital, Prime Movers Lab, and Engine Ventures, and is now working on raising a Series A.
The core thesis behind Overview is to allow solar farms to generate power when the sun isn’t shining, turning solar into a firm, 24/7 renewable resource. What’s more, the satellites could direct their energy anywhere in the world, depending on demand. California solar farms, for example, could receive energy in the early morning hours. Then, as the sun rises over the West Coast and sets in Europe, “we switch the beam over to Western Europe, Morocco, things in that area, power them through the evening peak,” Marc Berte, the founder and CEO of Overview Energy, explained. “It hits 10 p.m., 11 p.m., most people are starting to go to bed if it’s a weekday. Demand is going down. But it’s now 3 p.m. in California, so you switch the beam back.”
That so-called “geographic untethering” will be a key factor in making all of this economically feasible one day, Berte told me. The startup is targeting between $60 and $100 per megawatt-hour by 2035, when it aims to be putting gigawatts of commercial space solar on the grid. “It’s 5 o’clock somewhere,” Berte told me. “You’re profitable at $100 bucks a megawatt-hour somewhere, instantaneously, all the time.”
Making the math pencil out has also meant developing super-efficient lasers and eliminating all power electronics on its custom spacecraft. The type of light Overview beams to earth — called “near-infrared” and invisible to the naked eye — is also very efficiently converted into electricity on a solar cell. While pure sunlight is only converted at 20% efficient, near-infrared light is converted at 50% efficiency. Thus, Overview enables solar panels to operate even more efficiently during the night than during the day.
Today, the startup also announced the successful demonstration of its ability to transmit energy from a moving aircraft to a ground receiver three miles below — the first time anyone has beamed high power from a moving source. Although Overview’s satellites will eventually need to transmit light from much farther away — around 22,000 miles from Earth — the test proved that the fundamental technical components work together as planned.
“There’s no functional difference from what we just did from an airplane to what we’re going to do in 10 years at gigawatts from space,” Berte told me. “The same beacon, the same tracking, the same mirror, the same lasers, all the same stuff, just an airplane instead of space.”
Overview’s ultimate goal is ambitious to say the least: It’s aiming to design a system that can deliver the equivalent of 10% to 20% of all global electricity use by 2050. To get there, it’s aiming to put megawatts of power on the grid by 2030 and gigawatts by the mid-2030s. Its target customers include independent power producers, utilities, and data centers, and the company currently has a SpaceX launch booked for early 2028. At this point, Berte says Overview will likely be starting up its own prototype production line, which it will scale in the years to follow.
That certainly won’t be a simple undertaking. To produce a gigawatt of power, Overview will need to deploy 1,000 huge satellites, each measuring around 500 to 600 feet across and weighing about 8 to 10 tons. The largest satellites currently in space are about 100 to 150 feet across, and roughly 5 to 10 tons. “No one really mass-manufactures satellites in the kind of quantities required,” Berte explained, and nobody is producing the design and form factor that Overview requires. “So we are going to have to in-source a lot of the integration for that.”
But while the startup’s satellites will span the length of about two football fields, they fold up neatly into a package about the size of a shipping container, making it possible for them to fit on a SpaceX rocket, for example. When the satellites beam their power down to Earth, they’ll target a beacon — also shipping container-sized — that will be placed in the middle of the solar farm.
Initially, Berte told me, Overview will target deployment in places where logistical challenges make energy particularly expensive — think Alaska or island states and territories such as Guam, Hawaii, and Puerto Rico. But first, the company must demonstrate that its tech works from thousands of miles away. That’s what the funding from its forthcoming Series A, which Berte expects to close in spring of next year, is intended for.
“That is to take us to the next step, which is now do it in space. And after that, it’s now do it in space, but big,” he told me. “So it’s crawl, walk, run, but most importantly, the technology and how you do it doesn’t change.”
Rob catches up with the Center for Strategic and International Studies’ Ilaria Mazzocco.
China’s electric vehicle industry, it’s now well understood, is churning out cars that rival or exceed the best products coming out of the West. Chinese EVs are cheaper, cooler, more innovative, and have better range. And now they’re surging into car markets around the world — markets where consumers are hungry for clean, affordable transportation.
On this week’s episode of Shift Key, Rob talks to Ilaria Mazzocco about her new report on how six countries around the world are dealing with the rise of Chinese EVs. Why do countries welcome Chinese-made EVs, and why do countries resist them? How do domestic carmakers act when Chinese EVs come to town? And are climate concerns still driving uptake?
Mazzocco is the deputy director and senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Ilaria Mazzocco: Chinese batterymakers have persisted in focusing on LFP batteries with some spectacular results, I would say. And partly I think that’s been thanks to just being able to deploy them at really large scale and just testing and getting them out there.
But I think BYD is really a great example of that. They invest so much in R&D that it’s really hard to compete with them on some of these things. That’s really the big challenge, where, if you want to make a cheap car, you need LFP. That’s why Ford sought out that licensing deal with CATL, was to acquire LFP battery technology. And LFP batteries are really something that Chinese batterymakers have really excelled at.
Now, there could be breakthroughs in other chemistries. There could be a catchup game with non-Chinese batterymakers that actually become good at making LFP. That’s entirely possible. But right now, if you’re an Indian carmaker and you want to make a cheap car, your best bet is probably to get it from BYD or CATL, or maybe Gotion or something like that. That’s really what you’re looking at.
Robinson Meyer: It also, though, really changes how we talk about a lot of the development of auto industries abroad. Because I mean, I realize this is how cars were made for a long time, but I think … basically like if you were to say, Oh yeah, we make our own internal combustion cars here, we simply import the engines from Detroit, and then we place them in our otherwise finished vehicles that we’ve made domestically, and then we put it under a domestic label. We’re very proud of that. That’s essentially what is happening when countries import batteries. The batteries are so central to the operation of the EVs and what the EVs are capable of that when you import your batteries, you’re really relying on your trade partner for a lot of the core physical capacity of that vehicle, and a lot of the core, underlying chemical engineering capability that that vehicle affords you.
It suggests to me that in terms of when you think about the global EV industry, there are companies that are dependent on some kind of Chinese battery export. There are companies that are dependent on some kind of Korean battery export. There’s a few American entrants — mostly Tesla. There’s a few European entrants. And that’s kind of it. Everyone else is piggybacking on the back of one of those core technologies.
Mentioned:
Ilaria’s new report: The Global EV Shift: The Role of China and Industrial Policy in Emerging Economies
Previously on Shift Key: How China’s EV Industry Got So Big
This episode of Shift Key is sponsored by …
Heatmap Pro brings all of our research, reporting, and insights down to the local level. The software platform tracks all local opposition to clean energy and data centers, forecasts community sentiment, and guides data-driven engagement campaigns. Book a demo today to see the premier intelligence platform for project permitting and community engagement.
Music for Shift Key is by Adam Kromelow.